Step 9: Introduction to OpEx planning with Assumptions, Drivers & Sub-Items

Utilize Assumptions, Drivers & Sub-Items to create a meaningful operating expense plan

When thinking about planning for operating expenses we can generally categorize them into 2 categories, variable and fixed. A variable expense will fluctuate with the growth of your company, e.g., commissions will increase as revenue increases. Whereas a fixed expense remains the same regardless of the company performance, e.g., monthly rent is a constant amount for the entire term of the lease. 

You can use a combination of Assumptions, Drivers & Sub-Items to model your variable & fixed Operating Expenses in Jirav. 

Helpful Hint:

Often times a good place to start when planning for operating expenses is to export your chart of accounts to Excel, review the accounts one by one and note the metholdogy to be used for each.

Assumption Overview

Assumptions are global drivers for your business that can be referenced throughout your Jirav model. They do not vary by month and do not have actuals associated with them. The key assumptions located in the Assumptions planning table are customizable and can be defined from Setup > Assumptions. The values for the defined assumptions are then added from Plans > Assumptions. 

Driver Overview

A Driver is a formulaic expression used to forecast the value of an account. Each Driver has a Start & End Date and multiple drivers can be used to forecast the same account as they are additive in nature. Drivers can be added from the individual planning tables or from Plans > Drivers.

 

Sub-Item Overview

Sub-Items rollup to Accounts and allow you to plan for an account at a more granular level. Multiple sub-items can rollup to an account and they are specific to the plan and department that they are entered at. Sub-Items are added from the individual planning tables. 

Continue to Step 10: Create a % of Revenue OpEx Driver